Posted by Jonathan Maus (Publisher/Editor) on November 14th, 2012 at 3:19 pm
of his Budget Advisory Committee
(Photo © J. Maus/BikePortland)
The budget outlook for the Bureau of Transportation is a bit better this year than it was last year; but things are still grim. I attended the first of three PBOT Budget Advisory Committee meetings last night to get the lowdown and words like "triage" were being thrown around. But amid the doom and gloom, there are some interesting developments to report that could brighten the picture.
The big takeaway from last night is that PBOT is prepping for a $4.5 million budget gap in fiscal 2013-14 (which runs July-June). Those cuts are to be ongoing cuts, which means coupled with last year's huge cuts, the bureau is seriously hurting.
Here's why these further cuts are necessary:
- PBOT's take from the State Highway Trust Fund has been downwardly forecasted by ODOT to the tune of $1.8 million.
- PBOT's retirement and health benefit costs have doubled from 2011 to 2012, and now require an additional $1.4 million.
- PBOT has debt service obligations of about $1 million (primarily due to bonds taken out for Sellwood Bridge and Portland Milwaukie Light Rail projects).
To make the cuts, PBOT will use a similar process as last year. They'll rank all internal programs on a spreadsheet and fund those first. Then, all leftover money will be doled out according to a map that lists the "streets of citywide significance." That concept was hatched by PBOT Director Tom Miller last year and it prioritizes streets that, "are of the highest value for the transportation function" and that, "carry the most volume across all modes." (I'll have more on these details as the budget process moves forward.)
Miller led last night's meeting and he went over several factors that are contributing to PBOT's dire straits.
First and foremost, as many of you already know, the buying power (it hasn't kept up with inflation) and the overall intake of gas tax continues to fall. And, as fuel efficiency improves and people drive fewer miles, the trendline of what the city brings in from gas tax doesn't look pretty.
Furthermore, Miller explained that while the gas tax is one of the city's largest sources of revenue, relying on it presents a conundrum:
"The more effective we become with providing Portlanders with choices, the more successful we are at helping transition people to other means of travel, the fewer dollars we have coming through the doors.... Our policy goals are a lot further ahead than the funding structures. That's a challenge, that, as a community we have to reconcile."
Another factor shrinking PBOT's budget is fewer dollars coming from federal and other outside grant sources ("other people's money" is how Miller described it). Miller said that figure was about $120 million two years ago and next year it's slated to be only about $50 million. It's worth noting that PBOT is unique among all city bureaus in that it's largest sources of funding (outside grants and the State Highway Trust Fund) are completely out of their control.
With dwindling funds and a huge maintenance backlog and long lists of projects they'd like to do, PBOT needs a new revenue stream. Last year, before the budget talks started, PBOT (and their Budget Advisory Committee) received a mandate from City Council and the Mayor that they were not allowed to even consider new revenue streams. The politics were just not there.
PBOT has not yet received similar notice this time around (they're "anxiously" awaiting official budget guidance from City Council). However, regardless of whether or not Council makes the same edict as last year, the ice around the conversation for new revenue seems to be melting. This is evident by the actions and words of both Miller and his staff.
Miller announced last night that a task force of financial experts is currently working on a report for PBOT that will detail a number of possible new funding streams. Among them: "performance pricing" for parking; a street fee; and a local increase in the gas tax.
"Performance pricing" is essentially dynamic pricing for parking spots where the price fluctuates based on demand. Miller shared last night how PBOT has already started this type of pricing around Jeld-Wen Field during Portland Timbers home games. When demand for the 455 metered spots around the stadium is highest, the price is $3.50 per hour compared to the regular downtown rate of $1.60.
In addition to the new revenue from performance pricing, Miller said a goal of expanding the program would be, "To send a signal to say, 'Hey, you might want to take transit.' It's just a little nudge to think about a different transportation choice."
Miller also hinted that the groundwork is being laid for another try at introducing a citywide "street fee." This would be third time it comes up in Portland. As transportation commissioner in 2001, Mayor-elect Charlie Hales tried to make one happen in 2001. Then in 2007, then transportation commissioner Sam Adams also tried. Both attempts were pushed back after opposition from various interest groups (grocers in 2001, a petroleum lobbyist representing convenience stores in 2007) ; but with today's political and funding environment, the third time is very likely to be the charm.
Last night, Miller referred to the street fee as a, "Fee for access to the public right of way," and various staffers around the table pointed out that 20 jurisdictions around the state already have such a fee in place. But don't expect it to happen for at least another year or two. Miller said, "My presumption is that a brand new council won't take on the heavy lift," and added that it won't happen unless a "Broad coalition of support exists to push it into the finish line"
The financial task force's report will also include the recommendation to increase the local gas tax. Given that a 5-year moratorium on local gas tax increases (due to the Jobs and Transportation Act legislation that passed in 2009) is over in 2014, I won't be surprised if PBOT jumps on this one.
Given these new revenue ideas, Miller said he's developing two separate budgets. The "Plan B budget" would be one that, "provides a balanced, conservative, sober budget with no new revenue at all." Miller's "Plan A budget" would be "built on some new revenue" just in case Council gives PBOT the green light to consider it.
I sense a growing chorus among PBOT management that real funding reforms are on the horizon. They are speaking about them in more detail and with more urgency and confidence than I've ever heard. In the past, this stuff was talked about as if it would never actually happen. Now, it's not if, it's when and how.
"Frankly," Miller said at the end of the meeting, "It's time to reinvent how we fund transportation. That's the bottom line. It's not an easy conversation, but it's one that has to be had."
- PBOT budget proposal cuts active transportation by $1.5 million
- $700,000 expected in PBOT budget now gone
- PBOT's effort to cut budget could hit street lights, streetcar
- PBOT Budget Advisory Committee asks Council to look at new revenue sources
- BTA-led coalition seeks to restore active transportation cuts in City budget